Advice and appeals

By Jonathan Aronie

Jun 23, 2003

There is a time-honored rule in procurement that says vendors rely on the advice of their contracting officers at their own risk. It seems that not a month goes by without the continued viability of this rule being tested by a company and reaffirmed by a court or board of contract appeals. Last month, United Partition Systems Inc., a 16-year veteran of the General Services Administration's schedule contracts program, became the most recent test case.

In 2000, the Air Force awarded United Partition Systems a $108,404 task order under its schedule contract. A dispute later arose between the parties concerning the company's performance, which led to a termination of the order for reason of default. The Air Force termination letter informed the company that it could submit a claim pursuant to the contract's dispute clause.

The company subsequently filed a claim with the Air Force contracting officer. Not surprisingly, it was denied. The decision advised United Partition Systems that it could appeal to the Armed Services Board of Contract Appeals (ASBCA). With high hopes, the company did so.

Unfortunately, the contracting officer was a little confused. A termination dispute in which a vendor claims that it was not responsible for the performance problems that the government alleges goes to the GSA contracting officer, not the contracting officer of the ordering agency. Furthermore, if the vendor appeals the contracting officer's final decision, that appeal goes to the GSA Board of Contract Appeals, not ASBCA. Accordingly, the ASBCA concluded that it lacked jurisdiction and dismissed the company's appeal entirely.

The fact that United Partition Systems was simply following the direction of its contracting officer was of no importance.

The Air Force contracting officer perhaps can be forgiven for not fully understanding the rules governing disputes involving GSA schedule contracts. After all, the rules are not models of clarity.

The termination for default clause for GSA schedule contracts, however, has not been modified. Therefore, in the context of a GSA schedule contract, a termination dispute that involves a vendor's claim that the alleged performance problems were excusable still must be directed to the GSA contracting officer.

All of this is probably no great solace to United Partition Systems, which now must begin the dispute process anew before another GSA contracting officer. It could have been worse.

In the end, the fundamental rule that emerges from United Partition Systems' experience is no different from the rule that contractors — old and new — have learned the hard way for years: Although contracting officers often are excellent sources of information regarding complex rules and regulations, their advice should mark the beginning of a contractor's inquiry, not the end.

Aronie is an attorney with Fried, Frank, Harris, Shriver & Jacobson in Washington, D.C., and co-author of "Multiple Award Schedule Contracting." He can be reached at aronijo@ffhsj.com.

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